Author Archive: traadmin

My cousin and her husband are a definite yes. When people are too stupid to learn from their mistakes.. yes you will end up on the same path.

On the other hand I would have to say no. Things happen. When my husband and I got married we both carried our share of debt. Then we got an awsome deal on a house We got a house that was appraised for $125000 for $104000.

I knew the people and loved the house. We kind of jumped into this one a little to early. Then we had kids with doctors bills, and then the roof on the garage needed to be reshingled, then a hot water heater, then car repairs. It was one thing after another. Then I started buying groceries on credit card because I knew we would be short. Trust me.. we didn’t get our credit card debt by buying luxury items.

I am reading a book called “The Bankruptcy Solution“. It is great information and takes you through all of the alternatives. I am looking at all my options before anyone is decided upon.

take your morgage/rent + utilities(electric, water, heat, phone) for the month divide by 4,put that aside each week

figure out what you spend for food weekly

figure out transportation,car payments, insurance, gas

What money is left?

What else do you spend your money on? What do you really need? If you haven’t cut up your credit cards yet, do that? Don’t go to the stores, can’t spend it if you don’t go. When you do go to the store make a list, if its not on the list don’t buy it. This also is very hard.

Deal with the debt how much, to who, What can you pay after everything else is paid start on them. Finally, go get $500 loan here and pay all unpaid bills. I like Dave Ramsey’s books, go to the library and borrow one of those.

This blog is just what I need. I’m glad i joined. My situation: I went to Los Angeles a few weeks ago on vacation for a week. I only went because I plant to move there as soon as I secure work. after the trip my account was down to -200. yesterday it was down to -107. I got paid today and now I’m at $555. cool right? no! after I pay my rent I’ll be negative again. my rent is $595. I’m broke and havent paid my cell $73(due july4) or my cable $40 (due july 9). I’ve really been working hard trying to get my money right. I dont get paid again until july 12th. after that I think I might be fine.

I just hope my rent check doesnt bounce and it shouldnt since I have overdraft protection. any advice on my situation and how to avoid this in the future?

Exactly. When my hubby and I get ambitious and buy a lottery ticket, I always say I want to win just enough to pay off our credit cards. Not even the house! Just our credit cards because we would be so much better off.

I see my parents and how they struggle to try and make ends meet. They recently had their car repossessed and we had to loan them our beater truck until they came up with the money to get it back. My parents are living off $750/mo soc sec and $100/mo retirement on my dad, and my mom has a day care of 3 kids.

Both families are on vacation this week so there is $0 coming there. It is awful to see your parents struggle. I don’t want my kids to do the same with us.

The thing is.. if you have filed bankruptcy.. your bills are pretty much gone. So why would you need to steel? That’s the thing. Filing bankruptcy is a legal way of asking for help. In my circumstance, if we do file I would have to file chapter 13. I want to pay all of the money back, but I just am having difficulties with trying to take care of everyone at the same time.

I haven’t talked about this with my hubby yet, but there is a job that he keeps applying for that we know looks at his credit report. They have turned down people because of debt to income ratio. Well.. If you file bankruptcy protection and reaffirm your debts.. what would be the problem.

More about advantages and disadvantages of BK:

Everyone makes mistakes. I know if we end up taking the bankruptcy road, credit cards are a thing of the past. With our credit card bills gone, we would have no problem working on a cash only basis. We would have over $1000 extra fee each month to get our student loans paid off and then to put towards our mortgage. It made me ill having to charge groceries last night.

Best prediction of future behavior is past behavior. So, a bankruptcy usually means that the person got out of control with their finances. And the statistics show that a high percentage of people who get out of debt by bankruptcy, or being given money, just do it again. It’s not usually an issue of money, but an issue of spending. It’s like weigt loss. Treat it like a diet, and you gain it back. Treat it as a lifestyle change, and you can beat it.

I know that some people have actually had somebody bad happen to cause the financial problem, such as huge medical bills, house fire, earthquake, etc. But most of us simply got in over our heads with credit and spending. And that is what they are looking for.

Also, insurance companies have figured out that people with bad credit get into more accidents. I don’t know why. Perhaps it is the stress. Perhaps they think people who are careless with money are more careless with driving. I really don’t know. But they have done studies and found that people with bad credit do cost them more in paying out insurance. So, they charge higher rates for people with bad credit.

Do yourself a favor and get rid of them and never get any more credit cards. They are horrible burdens. I’m not sure what you could charge up with them that is worth the worry. I’ve tried to get rid of the rest of mine and it’s a nightmare! With such low credit limits, just pay them off and if you decide to keep them , if you buy something pay it off before you use it again and make payments on time, after making 3 to 4 “on time payments” try to renegotiate your interest rates.

with such small balances, i’d pay them off… specially your second one with the $6 processing fee!?! Defeinately if you can afford to. You might very well want to close them out too if you feel you’ll be tempted to get the balances back on there in the future. But part of your credit score does count towards the history of your cards so if you close them that may lower your scorre if i understand that correctly.

But closing the cards would be the better option if you feel you might be in the same boat later on dwon the line. CC debt is rough and it’s hard to get out of. I’m trying to do that myself!

Q: My parents declared bankruptcy several months ago and one collection agency is trying their scare tactics saying they represent a creditor (Sears and Western Auto) and that they would like my parents to acknowledge the debt and to allow them to “take back” all of their appliances that my parents originally bought using the store’s credit cards. Not of any loan.

Can a collection agency take appliances from one’s home based solely on a purchase made by credit cards? I never heard of such a thing.

I believe they are pressuring my elderly parents to voluntarily give up their washer and refrigerator but making it sound “official” like they have to. Even their letter head sounds like they are some official entity when in fact they are not.

Suggestions?

A: Credit is not hard to understand…

First you have 2 cards so you can start establishing a good payment record. A good record consist of 12-24 months of NO LATES!

Second is you need steady employment of 2 yrs or more in the same field.

Third and last is once you get credit keep the balances under 30% of credit line. Now this can be a bit confusing. Some cards do not report credit limits so on these you actually need to charge up to your limit to set a high balance and then keep that amount under 30%.

Your key here I think is the 24 months payment history and the high credit balances. I would suggest you pay down the balances to under 30% credit line or high credit balance (look on your credit report to see if they are reporting the limit or just the high balance). Then I would not apply for anything until you reach a 24 month GOOD payment record.

Patience is important because it does take time to build. Just wait it out and it will come….

Q: Is your LOC a home equity loan? You did a good thing to put those cards away. Is your monthly debt more than your monthly income? If it is you need to find a way to increase your income or decrease your debt (no brainer there!). Do you and dh both work?

A: Yes, the LOC is a home equity line, and we do pay out each month more than we take in. Even if we cut down to the minimums each month, it’s still more than we bring in. I’ve talked about getting rid of the cable (both tv and computer) and my hubby practically hyperventilates! It would be a big deal for him to give up the tv (sports nut) and it would be a big deal for me to give up the cable line for the computer, so I figured at least it would be even. He balks at it, but it’s much harder for him when I ask him if it’s worth $1,200.00 a year.

And yes, it is a no-brainer to increase income or decrease debt…. unfortunately, no-brainers don’t always get followed effectively! My husband works in accounting/finance (oh, the irony!) and for the most part, I’m a SAHM. I am a Southern Living at Home consultant and make a bit of money with that, but our income is primarily from hubby. Neither he nor I want me to go back to work, but at least we know we aren’t down to our last penny with no options.

HEL loans are explained in this video:

I am in the same boat as well. I am a SAHM and the only way I can work is to find a job that I can only work during school hours. Unfortunately, jobs like that are hard to come by, but I am still trying. It is not worth sending my kids to daycare after school bc it will cost $500 a month and I will only be making about that much:( Right now I am selling some things on ebay. Things that I never use, clothes still with tags that I have never worn, etc. It is helping and giving me some extra $$ to pay on CC’s monthly.

Q: I have read through some posts and am glad I have found this place. My hubby and I are working at getting out of debt. We have listened to Dave Ramsey for a couple years and have gotten some bills paid off and cut up the credit cards so that we don’t get in further but its been slow going. For some background this is where we are right now…

4800 to credit card

6500 car no.1

8500 car no.2

9500 2nd mortgage

We aren’t behind or anything at this point, but still live basically paycheck to paycheck. I am just needing some motivation and accountability for sticking with my budget and getting more focused. Hopefully chatting with people in similar situations will help.

A: i have a question….. what’s a 2nd mortgage? is that a home equity loan?

Good luck on your debt payoff….. we aren’t behind as well..just trying to get it paid off…. not living pay check to paycheck so much but that’s because my hubby is deployed and the combat pay helps!

Q: Yep, our second mortgage is a HEL. When we moved into this house it needed alot of work. We had planned to work on it when we had the extra cash. Of course we got pregnant with baby number 3 and decided we needed new carpet right away and to pay off my dh’s truck and get a cheaper one. But after riding in that old truck for a year we decided we needed a more appropriate family vehicle (enter car payment no 2 again). It makes me kind of crazy knowing that essentially I am paying for 3 vehicles one of which was sold three years ago, carpet that is already getting worn out due to a steady flow of family traffic, and still paying for Christmas five years ago on credit cards. UGH STUPID STUPID. LOL

I am very glad to hear you plan is working so well. Its nice to start digging out of the dark hole and finally see light.